Can you change a life insurance policy?
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Asked June 8, 2010
The answer to this question depends on your insurance company, the type of life insurance policy you have, and the types of changes you need to make. Some changes, such as changing the beneficiary, are relatively common and can be made to any policy, while others, such as increasing the amount of the policy, may be more involved and not well suited to changes. One way to get around a fixed policy is to add a rider for the new coverage, which modifies the existing policy without taking out a new policy.
Some insurance agents will try to convince you to take out a new policy instead of changing the existing one. Keep in mind that this option increases the costs to you, and creates more handling and other incidental charges. If your insurance company wants you to use this option, ask about a rider added to your existing policy instead. It is important to remember that if you cancel an existing policy you will be losing the accrued cash value as well, so taking out a new policy is tantamount to starting over from scratch.
Life insurance needs change, and making those changes to your policy should not mean giving up on current investments. If your insurance company is unwilling to modify the policy to include new expenses in your lifestyle, you may be better off to shop around online for an insurance company that more closely matches your specific needs.
Answered June 8, 2010 by Anonymous